Lufthansa takes off again after the shock of the pandemic - Companies

Lufthansa takes off again after the shock of the pandemic – Companies

The European number one in air transport made its first net profit in the second quarter since the start of the pandemic despite the social conflicts and the lack of staff which are disrupting the summer.

The last profit dates back to 2019. Since then, the abyssal losses have been linked together due to Covid-19: 6.7 billion euros in 2020 then 2.2 in 2021. 2022, the turning point seems successfulespecially thanks to air freight: for the second quarter, the group announced on Thursday that it had achieved its first net profit – 259 million euros – and forecasts for the year an operating result of “at least” 500 million.

If Lufthansa had previously indicated that it was aiming a return to the green, the group quantified the expected margin for the first time on Thursday. On the Frankfurt Stock Exchange, the title jumped 5.74% to 6.43 euros around 11:40 GMT. The announcement at the end of July, on the basis of preliminary figures, of a positive operating result in the second quarter, had already led to a jump in the price.

Cargo request

The carrier, which in addition to Lufthansa also includes Austrian, Swiss, Brussels Airlines and Eurowings, has mainly benefited through its cargo branch continued high demand and prices in freight transport. On the passenger side, their number quadrupled in the first half year on year, to 42 million in six months. The passenger activity was therefore able to reduce the lossto 86 million euros in the second quarter, compared to 1.2 billion in 2021.

Over the first six months, the group’s airlines remain in the red by 1.2 billion euros in total, with only Swiss having made a meager operating profit of 45 million. Austrian Airlines barely went into the green in the second quarter only.

The cargo branch released for its part 482 million euros in operating profit in the second quarter, up year on year, reaching an operating profit of almost one billion in the first half. Her technical subsidiarywhich provides repairs to one in five passenger planes in the world, generated 100 million euros in the second quarter.

Next year, travel progress should be confirmed with the reopening of Japan and China, according to the boss, Carsten Spohr. Capacity, representing the number of seats open for reservation based on expected demand, should reach in 2023 between 85% and 90% of the 2019 level.

“Painful” disturbances

However, “the joy of seeing strong demand is disturbed” by “painful operational issues“, admitted Mr. Spohr. At issue: disruptions at airports due to a lack of staff, which will cost between 350 and 400 million euros in reimbursements and loss of earnings this year.

“The Lufthansa group is back in the green” but “it is now a question of continuing to stabilize operations.” Lufthansa has already had to cut thousands of flights to try to appease the disorder that has spread to airports with the strong post-pandemic recovery. The group has therefore slightly lowered its traffic expectations in the third quarter.

Lufthansa, which abolished more than 30,000 jobs since 2020, also plans to hire 5,000 people in the second half of the year, and an equivalent number next year. “The vast majority” of these recruitments concern pilots, flight and ground personnel, detailed Mr. Spohr.

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Despite a improved flight regularity and weekends of busy departures enamelled with fewer problems, “we think that the situation will remain difficult in the coming weeks”, he judged.

Lufthansa was also faced with a one-day strike by its ground staff at the end of July, leading to the almost total shutdown of operations at its two main airports, Frankfurt and Munich.

Negotiations continue with the Verdi union in parallel with discussions with the representatives of the pilots, who voted Sunday in favor of the principle of a strike. The direction is “optimistic” on a resolution of the conflict on the ground and “identifies a will to discuss” among the pilots, according to the CEO. The cost of a day’s strike can reach 35 million euros.

The last profit dates back to 2019. Since then, the abyssal losses have followed one another due to Covid-19: 6.7 billion euros in 2020 then 2.2 in 2021. In 2022, the turning point seems successful, especially thanks to freight air: for the second quarter, the group announced on Thursday that it had made its first net profit – 259 million euros – and forecasts for the year an operating result of “at least” 500 million. If Lufthansa had previously indicated that he was aiming for a return to the green, the group quantified the expected margin for the first time on Thursday. On the Frankfurt Stock Exchange, the title jumped 5.74% to 6.43 euros around 11:40 GMT. The announcement at the end of July, on the basis of preliminary figures, of a positive operating result in the second quarter, had already led to a jump in the price. benefited above all, through its cargo branch, from continued high demand and prices in freight transport. On the passenger side, their number quadrupled in the first half year on year, to 42 million in six months. Passenger activity was therefore able to reduce the loss, to 86 million euros in the second quarter, against 1.2 billion in 2021. Over the first six months, the group’s airlines remain in the red by 1.2 billion euros. euros in total, with only Swiss having made a meager operating profit of 45 million. Austrian Airlines barely went into the green in the second quarter alone. The cargo branch posted 482 million euros in operating profit in the second quarter, up year on year, reaching an operating profit of almost one billion in the second quarter. first semester. Its technical subsidiary, which repairs one in five passenger planes in the world, generated 100 million euros in the second quarter. Next year, the increase in travel should be confirmed with the reopening of Japan and the China, according to the boss, Carsten Spohr. Capacity, representing the number of seats open for reservation according to expected demand, should reach between 85% and 90% of the 2019 level in 2023. However, “the joy of seeing strong demand is disturbed” by ” painful operational issues,” Spohr acknowledged. At issue: disruptions at airports due to a lack of staff, which will cost between 350 and 400 million euros in reimbursements and lost earnings this year. “The Lufthansa group is back in the green” but “it it is now a question of continuing to stabilize operations.” Lufthansa has already had to cut thousands of flights to try to calm the disorder that has spread to airports with the strong post-pandemic recovery. The group has therefore slightly lowered its traffic expectations in the third quarter. Lufthansa, which has cut more than 30,000 jobs since 2020, also plans to hire 5,000 people in the second half of the year, and an equivalent number next year. “The vast majority” of these recruitments concern pilots, flight and ground staff, detailed Mr. Spohr. the situation will remain difficult in the coming weeks”, he said. Lufthansa was also faced with a one-day strike by its ground staff at the end of July, leading to the almost total cessation of operations at its two main Frankfurt airports. and Munich. Negotiations continue with the Verdi union in parallel with discussions with the representatives of the pilots, who voted Sunday in favor of the principle of a strike. The management is “optimistic” about a resolution of the conflict on the ground and “identifies a willingness to discuss” among the pilots, according to the CEO. The cost of a day’s strike can reach 35 million euros.

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